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AN INDEPENDENT NHS: a REVIEW of the OPTIONS by Brian Edwards About the Trust

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AN INDEPENDENT NHS: a REVIEW of the OPTIONS by Brian Edwards About the Trust AN INDEPENDENT NHS: A REVIEW OF THE OPTIONS by Brian Edwards About the Trust The Nuffield Trust is one of the UK’s leading independent health policy charitable trusts. It acts as a catalyst for the devising and development of new ideas and information. As a point of principle, the Nuffield Trust does not exert any form of censorship or control on the academic freedom of the author to express his or her view or opinions. Therefore the views stated in the publication are the author’s, and do not necessarily reflect the views of the Trust. Published by The Nuffield Trust 59 New Cavendish Street London W1G 7LP Telephone: 020 7631 8450 Facsimile: 020 7631 8451 Email: [email protected] Website: www.nuffieldtrust.org.uk Charity number 209201 © The Nuffield Trust 2007 ISBN-13: 978-1-905030-23-1 Typeset by Liquid Design and Communications Ltd Telephone: 01452 840986 Printed by Q3 Digital/Litho, Loughborough, Leics. Contents About the author .................................................................................................................. 5 Acknowledgements .............................................................................................................. 5 Preface.................................................................................................................................. 6 Introduction ........................................................................................................................ 7 Executive Summary ............................................................................................................ 9 1. Why now ? .............................................................................................................. 12 History ........................................................................................................................ 12 What problems would an independent NHS solve? ...................................................... 15 An NHS in transition .................................................................................................... 26 2. The continuum of public service change and government agencies ...................... 30 Background .................................................................................................................. 30 The British Broadcasting Corporation .......................................................................... 37 The railway industry .................................................................................................... 40 Postal services .............................................................................................................. 42 British Telecom.............................................................................................................. 44 Public regulators .......................................................................................................... 45 3. The options for change in the NHS ........................................................................ 47 Model 1: A modernised NHS Executive within the Department of Health.................... 48 Model 2: An NHS Commissioning Authority (the HEFCE model) ................................ 49 Model 3: An NHS Corporation – as a fully managed national service .......................... 50 Model 4: An NHS Corporation – as a planning and commissioning organisation ........ 54 Model 5: A regionalised NHS........................................................................................ 55 Model 6: An NHS commissioned by local government ................................................ 56 Model 7: An NHS as a public insurance company ........................................................ 57 Regulating an NHS Authority: the options .................................................................... 57 4. Some difficult questions.......................................................................................... 61 Summary of the arguments for and against an NHS Authority...................................... 68 References .......................................................................................................................... 69 AN INDEPENDENT NHS: A REVIEW OF THE OPTIONS About the Author Brian Edwards is Emeritus Professor of Healthcare Development at the University of Sheffield, where he was Dean of the School for Health and Related Research. He has extensive management experience in the health sector, having served as chair and chief executive of a number of NHS field authorities. He was a member of the NHS Executive, led many national groups, and was involved in the implementation of the Patient’s Charter. Acknowledgements I am very grateful to Patricia Day, Senior Research Fellow at Bath University, and Scott Greer, Assistant Professor at the University of Michigan, for their assistance with the research for this project. This work is based on reviews of current literature and interviews and discussions with ministers, civil servants, health managers and clinicians, as well as some of the leading players in other public sector corporations, agencies and non-departmental public bodies (NDPBs). While all of these people generously gave their help in shaping the ideas in this paper, the responsibility for the conclusions lies entirely with me. 5 AN INDEPENDENT NHS: A REVIEW OF THE OPTIONS Preface Discussion around the possibility of an independent NHS has frequently been mooted but often has been limited between two schools of thought: on the one hand that the sheer size of the budget for the NHS demands direct political accountability and control; on the other, that the electoral cycle has the effect of making the NHS a political football. The Nuffield Trust commissioned this project to help move the debate to a different level and more neutral territory, to explore governance models from different angles, and to review the special position of the NHS. Brian Edwards, Emeritus Professor of Healthcare Development at the University of Sheffield, reviews the various arguments and the history of this issue and asks the question, if we do want an independent health service, what are the reasonable options and their costs and benefits? His observations and analysis of comparable structures will be required reading for policy-makers and politicians at this important stage in the history of the NHS. We hope that this will be considered as an exploratory report, flagging the issues which will be encountered if these options are taken forward. If changes in governance are to be considered, an in depth examination of the current structure and impact of the options will need to be more fully explored before implementation of change. Kim Beazor Chief Operating Officer The Nuffield Trust 6 AN INDEPENDENT NHS: A REVIEW OF THE OPTIONS INTRODUCTION The Nuffield Trust commissioned an examination of the options for independent management of the NHS as a contribution to the current debate about the future of the NHS. The starting point for the project was the question of whether independent management is necessary and desirable for the NHS. Highlighted by Tony Blair’s recent statement1, the current discussion revolves around this issue. However, this report goes beyond the initial question and explores the options for an independent body. It describes the various arguments for changing the management and delivery structure of the NHS. Through interviews and discussions with a wide variety of sectoral interests, both within and outside the NHS, a myriad options for future management have been explored. After considering more than 17 different options, the report discusses in detail the seven most likely models of governance. Following the implementation of the 2006 Act2, the changes to the status of foundation trusts and the role of commissioners have already affected the responsibilities of ministers in relation to the NHS. Fundamental change is under way, which will lead to a very different structure from the one that exists today. These changes will create an even sharper distinction between commissioners and providers. Providers will look to their own financial and strategic interests as they compete with each other and new providers from outside the NHS. This will probably lead to mergers and consolidation in the hospital sector, and perhaps also in primary care. It is not possible to manage the NHS as a total system while foundation trusts retain their independence. If this is a fixed point of policy, the independence debate has to focus on commissioning. Thus some NHS specialists claim that with certain aspects of NHS management in flux, the status quo is not sustainable. However, during a series of interviews and discussions with a wide variety of sectoral interests, most of the participants were uncertain or ambivalent about the idea of ‘independence’ for NHS management. Their first instincts were to recommend a 7 AN INDEPENDENT NHS: A REVIEW OF THE OPTIONS consolidation of the current investment in the NHS and the delivery of existing service gain targets. They felt that there should be no further organisational change. Those who did have strong views presented one of two arguments: 1. that it was unthinkable that the political process would allow an organisation the size of the NHS, spending huge sums of public money, to become independent, or 2. that the way to improve the NHS was to stop politicians meddling in its management. This report aims to go beyond these two positions and to examine the case and options
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